The eleventh hour settlement deal, for an undisclosed amount, was announced shortly after this morning’s session began in the High Court causing yet more confusion to the already convoluted case.

A spokesman for PwC told Accountancy Age: ‘I can confirm that the UK and Singapore firms of Coopers & Lybrand have agreed a settlement with liquidators. The terms of settlement are confidential and subject to court approval in due course.’

Deloitte & Touche, auditors to the bank’s Singapore subsidiary where rogue trader Nick Leeson worked, are not part of the settlement deal.

Barings liquidators KPMG is suing Coopers and Deloittes for Pounds 1bn for negligence. Both firms have always maintained that the bank’s collapse was due to management failure.

Charles Aldous QC, lawyer acting for KPMG last Monday told the court: ‘The failings of the auditors were elementary.

‘If these basic audit failings had not happened Barings would still be here.’